Chinese macroeconomic indicators are notoriously dodgy. Besides opaque and unreliable data sources, there are occasionally outright fraudulent figures, such as the recent discovery of an entire province having fabricated fiscal data for almost half a decade (not a small backwater, mind you, Liaoning has a population the size of Spain.) Even Premier Li Keqiang once commented that China GDP figures are “man-made and unreliable”, preferring to rely on proxies such as electricity consumption and rail cargo volume. But, who says these secondary data items cannot also be falsified?

File photo: Wikicommons.

In contrast, the skies of Hong Kong present a unique and trustworthy gauge of Chinese economic activity. Manufacturing on the mainland, aided by lax if not nonexistent environmental safety standards, spews a rich soup of PM2.5, PM10, ozone, NO2, SO2, and CO galore into the atmosphere, a no small part of which drifts across the border into our skies.

Indeed, air clarity is not necessarily equivalent to air cleanliness. But for those of us who are not seasoned climatologists, it is a pretty close proxy. Observe the relationship between Hong Kong air quality and Chinese economic growth in the past decade:

In recent years, the frequency of “reduced visibility” (defined by the HK Observatory as visibility below 8km without fog, mist, or precipitation) in Hong Kong has been steadily decreasing. The pace of Chinese economic growth – measured by GDP growth or industrial production in the figure above – has also fallen, almost in lock step (disregard the “outlier” in 2008/09 from the Global Financial Crisis). Coincidence, correlation, or causation?

Skeptics may question the accuracy of data from GovHK, but those who have lived in Hong Kong for some time will surely recall how much of the past 10-15 years was marked by smoggy skies that lasted from autumn until late spring the following year, driven largely by northerly winds carrying our neighbor’s toxic airborne garbage. In the past year or two, such occurences have indeed subsided somewhat. Patches of blue sky can often be seen during the winter months; one morning last week yours truly woke up to an absolutely gorgeous sunrise.

Repeating the above analysis by replacing visibility with PM 2.5 and PM 10 concentration levels (normalized to 100 as of 2008), a similar trend follows:

One could also use readings from the Environmental Protection Department’s Air Quality Health Index (AQHI) to deduce comparable findings, but the index is arguably a less objective gauge as it employs some qualitative factors in its construction.

What’s next? China is definitely knee-deep in an economic slowdown, but Hongkongers can look forward to marginally more breathable air in the near future.

That said, make no mistake, the city’s air quality is still atrocious by international standards, frequently in massive breach of WHO guidelines. The main culprit is shifting from mainland Chinese factories to local emissions, especially from buses and trucks, many of which are not even compliant with European emissions standards introduced in the 1990s. GovHK has half-hearted plans to retire the worst polluting commercial vehicles, but these will take over a decade to complete and are a far cry from, say, the aggressive phasing-out timetables adopted by Singaporean authorities.

HKFP Contributor

Frank Siu is a financial econometrician working in the private sector. Born and raised in Hong Kong, he takes a keen interest in local affairs, particularly issues of rising social inequality and deepening political uncertainty. He enjoys curry fish balls and rubik's cubes.

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